At USDA’s Agriculture Outlook Forum, Chief Economist Seth Meyer said his department expects corn plantings of 92 million acres in 2021 and soybeans at 90 million acres for a combined record of 182 million acres due to strong prices. In prepared remarks, Meyer said, “The current tight stocks-to-use ratios for corn and soybeans, the lowest since 2013-14, and strong international demand for both commodities, suggest better returns for corn and soybeans relative to wheat, cotton, and many other crops, with a strong overall incentive to plant.” But as is the case every year, weather will be a key factor regarding final crop size. Meyer said USDA expects average cash prices of $4.20 per bu. for corn and $11.25 per bu. for soybeans in 2021-22.
For wheat, Meyer said that USDA expects a “small rise” in wheat area for 2021. He also noted that winter wheat harvested area is a “question.” USDA expects total wheat area of 45.0 million acres, up 651,000 acres from 2020-21 but still below the five-year average. While winter wheat plantings are forecast to climb 5% to 32 million acres, combined durum and spring wheat plantings are expected to fade amid stiff competition from corn and soybeans. USDA expects a season average cash price of $5.50 per bu. for wheat in 2021-22.
USDA expects cotton plantings of 12 million acres, according to Meyer. He noted a “considerable” cut to beginning stocks and steady exports should lower carryover in 2021-22.
For livestock, he outlined higher prices forecast compared with 2020 for live cattle at $115 per cwt., hogs at $50.50 per cwt., and broilers at 84.5 cents per pound. But to hit these price marks, he said there needs to be “robust domestic demand and solid exports.”
Also of note, Meyer said the rebuilding of the Chinese hog herd was a factor not only for the hog market but also for corn and soybeans. For corn, Meyer detailed, “What we have seen, though, in China, and what has sparked this big import of corn has been the spread between internal prices for corn in China and what corn prices are elsewhere in the world.” He put the difference in price at round $150 per metric ton. He also said the tariff-rate quota (TRQ) will not be a limit on Chinese corn imports, acknowledging outstanding sales of U.S. corn for the current marketing year already top 11 MMT, well above China’s 7.2 MMT TRQ for calendar year 2021.
USDA expects the U.S. to export a record $31.5 billion worth of farm goods to China in fiscal year 2021, with overall ag exports expected to total $157.0 billion, a $21-billion increase from FY 2020.
Meyer concluded that economic fundamentals for the ag sector remain positive, detailing: “While farm income is expected to decline on sharply falling ad-hoc government Covid-19 assistance, substantial growth in cash receipts for both crops and livestock is projected to support net farm income at 20% above the average of the previous 20 years.” More detailed supply and demand tables will be released tomorrow morning.